prelude to the industrial revolution the rise of capitalism
TRANSCRIPT
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IMPACT OF CHANGE
18TH CENTURY
Prelude to the Industrial Revolution
The rise of Capitalism
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Netherlands and Antwerp Large Trading port in the north of
Europe Perfectly situated for trade
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Netherlands and Antwerp Large Trading port in the north of
Europe Perfectly situated for trade Frugal people who put a high value on
saving Which leads to…
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Banking!!!
Surplus of capital leads to banks Banks are able to invest in businesses
and people are able to take out loans Businesses can take out capital to build
themselves This leads to accelerated development
of business
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Before we move on: Just a little bit of British History…
Scotland and England? Together at last?
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Just a little bit of British History… Scotland and England? Together at
last?
1706 Treaty of the UnionUnified Scotland and England politically
○ Brings to the end centuries of fighting
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What’s so great about Scotland and England coming together?
England has great food producing capacity
Scotland is nothing but rocks…Where there are rocks…
○ There are minerals: coal and iron
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Therefore…
England and Scotland are a match made in heaven to dominate the worldAnd they do.
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English System 18th Century Englishmen were becoming Capitalists
One that invests money in a business By the 17th Century English bankers had
developed a deposit banking service:They had enough money to lend out and
gain interestInvented a system of checkingBank notes were accepted as money
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Why was Banking Necessary? With the rise of capital and countries
investing cross border:Currency needed to be converted and
changedAccounts needed to be paid from long
distancesMoney needed to be stored
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England
Inflation hit everywhere except England where rising incomes rose faster than prices
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Inflation
Rising prices Too much money chasing too few goods Increase in spending which exceeds
increases in real production
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England
Inflation hit everywhere except England where rising incomes rose faster than prices
This lead to more investment abroad
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Cottage System (Putting out System) Central agency contracted out work to
subcontractors who completed work in their own facilities (usually their own home)
No more guilds Could charge whatever was market
price Supply and demand = more capital
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Conclusion
In England the putting out (Cottage system), extra money, banking, colonialism, larger markets all lead to the development of capitalism as an economic ideology.